Stock Dividends and stock Splits Stock dividend -a payment of additional shares of stock to shareholders. often used in place of or in addition to a cash dividend Small-percentage stock dividends Typically less than 20% of previously outstanding common stock Assume a company with 400,000 shares of $5 par common stock outstanding pays a 5% stock dividend. The pre-dividend market value is $40 How does this impact the shareholders?equity accounts? 18-1918-19 Stock Dividends and Stock Splits Small-percentage stock dividends Typically less than 20% of previously outstanding common stock. Assume a company with 400,000 shares of $5 par common stock outstanding pays a 5% stock dividend. The pre-dividend market value is $40. How does this impact the shareholders?equity accounts? Stock dividend -- A payment of additional shares of stock to shareholders. Often used in place of or in addition to a cash dividend